What Happened
Amazon has reportedly shelled out around $50 million to livestream ten NFL games of the new season, five times more than what Twitter paid last year. Interestingly, Amazon won’t stream the games to anyone who wants to watch online for free as Twitter did. Instead, the NFL Thursday night games will be a new addition to the ever-growing list of perks for Amazon Prime members.
What Brands Need To Know
On a larger picture, this deal signals the continuing shift of live sports viewing from TV to online streaming. Amazon reportedly beat out the likes of Twitter, Facebook, and YouTube for the bid, which underscores how determined the ecommerce giant is about growing out its streaming offering. The decision to only allow Prime members to stream this also points to the company’s core strategy that positions the membership program as the lynchpin for fostering customer loyalty.
This marks a very different approach than Twitter, who bought the rights last year to raise its profile as a live-streaming platform and generating revenues from selling the ad slots allocated for local TV ads at a high price. In comparison, Amazon wouldn’t necessarily be interested in selling ads (although it could very well use those ad slots to promote its services and original shows.) Researches have shown that Prime members on average spend two times more than regular shoppers on Amazon every year. Therefore, it makes sense that Amazon would pay the big bucks to secure the live-streaming rights of NFL games and use it to drive signups and retain subscriptions for Prime. Other brands should learn a thing or two from Amazon’s strategy and start thinking about ways to improve and integrate their loyalty programs so as to establish a long-term relationship with customers.
Source: Re/Code